Frontier Communications is on track to meet the first wave of its fiber build by passing more than 600,000 locations with fiber this year and bringing its total fiber footprint to about 4 million homes. The second wave of its fiber build will start in 2022 and end in 2025 and will consist of adding another 6 million fiber-enabled locations to its footprint.
Speaking this week at the virtual UBS Global TMT conference, Frontier President and CEO Nick Jeffery said that the company will add at least 1 million fiber-enabled locations in 2022 and accelerate its fiber build in 2023 and beyond to achieve its goal of having 10 million fiber-enabled locations in 2025. “We will accelerate beyond our current build rate,” he said, noting that the company has not seen any supply chain issues so far, and he’s cautiously optimistic that current suppliers will be able to keep up with Frontier’s deployment pace.
Frontier emerged from Chapter 11 bankruptcy last April and is transforming into a fiber powerhouse and revamping its customer service organization, which in 2020 was fined for misleading customers about internet speeds and charging them undisclosed fees.
Jeffery said that the momentum Frontier experienced in the third quarter is continuing in the fourth quarter and it is setting the stage for the company to be the “attacker in the market.” He qualified this by noting that Frontier is experiencing momentum while others (specifically cable companies) are not. The company reported 29,000 net adds in the third quarter and now has a total fiber subscriber base of nearly 1.39 million.
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In fact, Jeffery said that Frontier hasn’t seen any response, such as price drops or more aggressive marketing, from its cable competitors. However, he chalked this non-response up to the cable competitors being much bigger companies and not wanting to disturb their existing price plans.
When asked whether Frontier is seeing any competition from fixed wireless broadband offerings from companies like Verizon and T-Mobile, Jeffery said that the fixed wireless services might be attracting existing Frontier DSL customers in markets where it hasn’t deployed fiber yet. “They may nibble at our DSL network,” he said, adding that this is why the company is working so hard to convert its copper to fiber.
Jeffery also said that Frontier has a “sophisticated build model” that looks at the attractiveness of the market on a street-by-street basis and then once it decides to deploy fiber in that area it will pre-market the service to those homes and then go back and fulfill those sales once the fiber is deployed. “I am confident that we can sell the service as the network is lit,” he said.
The company is planning to launch a 2-Gig product in 2022 even though it is still aggressively pushing its 1-Gig service to consumers. Jeffery said that because Frontier wants to be seen as an aggressive fiber provider, it believes that launching a 2-Gig service will attract customers that have an appetite for more bandwidth and higher speeds. He also sees the 2-Gig offering as a way to push the company’s average revenue per user (ARPU) higher.
Interestingly, Jeffery said that Frontier’s network is already equipped to deliver up to 10-Gig services and the only thing the company needs to launch 2-Gig services is a compatible 2-Gig CPE for customers.